37.3.  Annual Service Report and Annual Service Plan

37.3.1.  Without prejudice to any other provision in this Agreement the Service Provider shall on the Annual Service Report Date at its own cost, provide to the Authority a written report (the "Annual Service Report") in accordance with the requirements of the [Output Specification and the Best Value Assistance and Reporting Method Statement].

37.3.2.  The Service Provider shall upon a written request from the Authority promptly provide such written evidence or other supporting information as the Authority may reasonably require to verify and audit the information and other material contained in the Annual Service Report.

37.3.3.  If, in the Authority's reasonable opinion, the provision, performance or delivery of the Services (or any part) may be more effective, efficient and economic having regard to the Annual Service Report and the Best Value Duty, then the Authority may serve a written notice upon the Service Provider (a "Best Value Service Change Notice") stating the nature and timing of the changes to the provision, performance or delivery of the Services (or the relevant part) which the Authority desires.

37.3.4.  The Service Provider shall, within twenty (20) Business Days of the date of receipt of the Best Value Service Change Notice, provide the Authority at its own cost with a written statement (the "Annual Service Plan") containing the Service Provider's proposals to achieve the change to the Services (or the relevant part) in accordance with the Best Value Service Change Notice.

37.3.5.  As soon as practicable after the Authority receives the Annual Service Plan, the parties shall discuss and agree the issues set out in the Annual Service Plan. In such discussions the Authority may modify the Best Value Service Change Notice, in which case the Service Provider shall, as soon as practicable, and in any event not more than twenty (20) Business Days after the receipt of such modification, notify the Authority of any consequential changes to the Annual Service Plan.

37.3.6.  If the parties cannot agree on the contents of the Annual Service Plan then the Dispute will be determined in accordance with the Dispute Resolution Procedure.

37.3.7.  As soon as practicable after the content of the Annual Service Plan has been agreed or otherwise determined pursuant to the Dispute Resolution Procedure the Authority shall:

a)  confirm in writing the Annual Service Plan; or

b)  withdraw the Best Value Service Change Notice.

37.3.8.  If the Authority either withdraws the Best Value Service Change Notice or does not confirm the Annual Service Plan within twenty (20) Business Days of the Annual Service Plan having been agreed or determined pursuant to the Disputes Resolution Procedure then the Annual Service Plan and the Best Value Change Notice shall be deemed to have been withdrawn.

37.3.9.  If the Authority confirms the Annual Service Plan then the Authority shall in accordance with the Change Protocol issue an Authority Change Notice (which shall include all the information set out in the Best Value Service Change Notice).

37.3.10.  [To the extent that the implementation of the proposals contained in the Annual Service Plan will result in a decrease in the costs of the Service Provider, the Payment shall be adjusted downwards in accordance with clause 33 (Financial Adjustments) to reflect the sharing in the decrease in costs [50:50] as to the Authority and the Service Provider respectively.]

37.3.11.  [To the extent that the implementation of the proposals contained in the Annual Service Plan will result in an increase in the costs of the Service Provider, the Payment shall be adjusted upwards in accordance with clause 33 (Financial Adjustments).]

37.3.12.  [The Service Provider shall take all reasonable steps to mitigate any costs arising as a consequence of a Best Value Service Change Notice and an Authority Change Notice served pursuant to clause 37.3.9 (Annual Service Report).]46

__________________________________________________________________________________________

46  The clauses in square brackets will need to be conformed with the Change Protocol.